Introduction to Symposium: The Crisis in Federal Budgeting

Abstract

It will not come as a surprise to anyone who reads this journal that the federal budget— indeed, federal budgeting—is a mess. The problems are both substantive and procedural. Barring some unforeseen and unprecedented event, fiscal year 2012, which will end on September 30th of this year, will represent the fourth consecutive year of deficits in excess of $1 trillion. Over this four-year period, more than $5 trillion has been added to the national debt, which will stand at more than $11 trillion (more than 70 percent of GDP) by the end of 2012. While much of this growth in debt can be traced to the most recent recession and attempts to address it, something will have to be done to address the chronic imbalance between taxes and spending. The procedural story is not much better. In fact, the procedural challenges facing the budget predate the recent increase in the deficit. There are three main problems with the federal budget process as of 2012. First, appropriations legislation, necessary to fund 40 percent of the government on an annual basis, is chronically late. Second, and related, the budget resolution, designed to promote the setting of overall fiscal policy, has become an “optional” device, seemingly only enacted when broad consensus already exists on a path for the budget; there has been no budget resolution in 7 of the past 15 years. Third, the budget process, far from encouraging fiscal discipline, detracts from a responsible approach to budgeting, in part because of the dysfunction of the political system and partly because the appropriations process tends to focus on the provision of specific benefits to particular constituencies. Both the magnitude of the problems, and past history, would indicate that these difficulties are not likely to disappear between now and the 2012 election. In fact, the campaign itself is unlikely to feature an illuminating debate concerning the future fiscal path that